Chapter 431 — Chapter 431

§431:15-317 Voidable preferences and liens. (d) A transfer of property for or on account of a new and contemporaneous consideration which is deemed under subsection (b) to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer …

§431:15-318 Claims of holders of void or voidable rights. (a) No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance, voidable under this article, shall be allowed unless the creditor surrenders the preference, li…

§431:15-319 Setoffs and counterclaims. (a) Mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this article shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b) and…

§431:15-320 Assessments. (a) As soon as practicable but not more than two years from the date of an order of liquidation under section 431:15-307 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth: (c) After levy of assessment…

§431:15-321 Reinsurer's liability. The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of delinquency proceedings, regardless of any provision in the reinsurance contract or other agreement. Payment made directly to an insured or other credit…

§431:15-322 Applicability of claims settlement provisions to loss claims. Section 431:15-310(a)(18), section 431:15-325 through section 431:15-328, section 431:15-333, section 431:15-403(c), section 431:15-406, and section 431:15-407 do not apply to loss claims to the extent that…

§431:15-323 Recovery of premiums owed. (a) A producer, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay upon written demand by the liquidator any unpaid collected premium held by the person, w…

§431:15-324 Domiciliary liquidator's proposal to distribute assets. (a) Within one hundred twenty days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this State, the liquidator shall make application to the court for approval of a pro…

§431:15-325 Filing of claims. (a) Proof of all claims shall be filed with the liquidator in the form required by section 431:15-326 on or before the last day for filing specified in the notice required under section 431:15-311, except that proof of claims for cash surrender value…

§431:15-326 Proof of claim. (a) Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable: (b) No claim need be considered or allowed if it does not contain all the information in subsection (a) which may be applicab…

§431:15-327 Special claims. (a) The claim of a third party which is contingent only on first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency. (b) Any claim that would have become absolute if there had been no terminati…

§431:15-328 Provisions for third party claims. (a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator. (b) Whether or not the third party files a claim, the insured may file a cl…

§431:15-329 Disputed claims. (a) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or the claimant's attorney by first class mail at the address shown in the proof of claim. Within sixty days from the …

§431:15-330 Claims of surety. Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of …

§431:15-331 Secured creditor's claims. (a) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct: (b) The determination shall be under the supervision and control of the court with due regard for the recomme…

§431:15-332 Priority of distribution. The priority of distribution of claims from the insurer's estate shall be in accordance with the order in which each class of claims is herein set forth. Every claim in each class shall be paid in full or adequate funds retained for the payme…

§431:15-333 Liquidator's recommendations to the court. (a) The liquidator shall review all claims duly filed in the liquidation and shall make such further investigation as the liquidator shall deem necessary. The liquidator may compound, compromise, or in any other manner negoti…

§431:15-334 Distribution of assets. (a) Subject to any instructions the court may give, the liquidator shall make distributions pursuant to section 431:15-332 in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious comple…

§431:15-335 Unclaimed and withheld funds. (a) All unclaimed funds subject to distribution remaining in the liquidator's hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person…

§431:15-336 Termination of proceedings. (a) When all assets justifying the expense of collection and distribution have been collected and distributed under this article, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other or…

§431:15-337 Reopening liquidation. After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the circuit court of the first judicial circuit to reopen the proceedings for good cause, inc…

§431:15-338 Disposition of records during and after termination of liquidation. Whenever it shall appear to the commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, the commissioner may recommend to the court and th…

PART IV. INTERSTATE RELATIONS §431:15-401 Conservation of property of foreign or alien insurers found in this State. (a) If a domiciliary liquidator has not been appointed, the commissioner may apply to the circuit court of the first judicial circuit by verified petition for an o…

§431:15-402 Liquidation of property of foreign or alien insurers found in this State. (a) If no domiciliary receiver has been appointed, the commissioner may apply to the circuit court of the first judicial circuit by verified petition for an order directing the commissioner to l…

§431:15-403 Domiciliary liquidators in other states. (a) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under section 431:15-404(c), be vested by operation of law with the title to all o…

§431:15-404 Ancillary formal proceedings. (a) If a domiciliary liquidator has been appointed for an insurer not domiciled in this State, the commissioner may file a petition with the circuit court of the first judicial circuit requesting appointment as ancillary receiver in this …

§431:15-405 Ancillary summary proceedings. The commissioner, in the commissioner's sole discretion, may institute proceedings under section 431:15-201 through section 431:15-203 at the request of the commissioner or other appropriate insurance official of the domiciliary state of…

§431:15-406 Claims of nonresidents against insurers domiciled in this State. (a) In a liquidation proceeding begun in this State against an insurer domiciled in this State, claimants residing in foreign countries or in states not reciprocal states must file claims in this State, …

§431:15-407 Claims of residents against insurers domiciled in reciprocal states. (a) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this State may file claims either with the ancillary …

§431:15-408 Attachment, garnishment and levy of execution. During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment or levy of execution shall be commenced o…

§431:15-410 Subordination of claims for noncooperation. If an ancillary receiver in another state or foreign country, whether called an ancillary receiver or not, fails to transfer to the domiciliary liquidator in this State any assets within the ancillary receiver's control othe…

§431:15-411 Separability. If any provision of this article or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the article and the application of such provision to other persons or circumstances shall not be affected the…

ARTICLE 16 GUARANTY ASSOCIATIONS PART I. PROPERTY AND LIABILITY INSURANCE GUARANTY ASSOCIATION §431:16-101 Title. This part shall be known as the Hawaii Insurance Guaranty Association Act. [L 1987, c 347, pt of §2]

§431:16-102 Purpose. The purpose of this part is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and, to the extent provided in this part, to minimize financial loss to claimants or policyholders becaus…

§431:16-103 Scope. This part shall apply to all types of direct insurance, but shall not apply to the following:

§431:16-104 Construction. This part shall be construed to effect the purpose under section 431:16-102 which will constitute an aid and guide to interpretation. [L 1987, c 347, pt of §2; am L 2000, c 93, §3]

§431:16-105 Definitions. As used in this part: "Affiliate" means a person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31 of the year immediately preceding the date th…

§431:16-106 Creation of association. There is created a nonprofit unincorporated legal entity to be known as the Hawaii insurance guaranty association. All insurers defined as member insurers in section 431:16-105 shall be and remain members of the association as a condition of t…

§431:16-107 Board of directors. (a) The board of directors of the association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approva…

§431:16-108 Powers and duties of the association. (a) The association shall: (b) The association may: (c) Except for actions by the receiver, all actions relating to or arising out of this part against the association shall be brought in the courts in this State. The courts in th…

§431:16-109 Plan of operation. (b) All member insurers shall comply with the plan of operation. (c) The plan of operation shall: (d) The plan of operation may provide that any or all powers and duties of the association, except those under section 431:16-108(a)(3) and (b)(2), are…

§431:16-110 Duties and powers of the commissioner. (a) The commissioner shall: (b) The commissioner may: (c) Any final action or order of the commissioner under this part shall be subject to judicial review by the circuit court of the first judicial circuit. [L 1987, c 347, pt of…

§431:16-111 Effect of paid claims. (a) Any person recovering under this part shall be deemed to have assigned the person's rights under the policy to the association to the extent of the person's recovery from the association. Every insured or claimant seeking the protection of t…

§431:16-112 Exhaustion of other coverage. (a) Any person having a claim against an insurer whether or not the insurer is a member insurer under any provision in an insurance policy other than a policy of an insolvent insurer that is also a covered claim, shall be required to exha…

§431:16-113 Prevention of insolvencies. To aid in the detection and prevention of insurer insolvencies:

§431:16-114 Tax exemption. The association shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions except taxes levied on real or personal property. [L 1987, c 347, pt of §2]

§431:16-115 Recoupment of assessment. (a) Each member insurer shall annually recoup the assessments paid in the preceding years by the insurer under this part. The recoupment shall be recovered by means of a surcharge on premiums charged for policies for all kinds of insurance, e…

§431:16-116 Immunity. There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the association or its agents or employees, the board of directors, any person serving as an alternate or substitute representative of any…

§431:16-117 Stay of proceedings. (a) All proceedings in which the insolvent insurer is a party, or is obligated to defend a party in any court in this State, subject to waiver by the association in specific cases involving covered claims, shall be stayed for up to six months, and…

PART II. LIFE AND DISABILITY INSURANCE GUARANTY ASSOCIATION §431:16-201 Title. This part shall be known as the Hawaii Life and Disability Insurance Guaranty Association Act. [L 1987, c 347, pt of §2]